Surplus charges up to 1500% as is with cereals will be trimmed after the introduction of a national register of traders of agricultural products. The register is the response of the Ministry of Agricultural Development and Food to the fight against speculation which, according to farmers' associations, has significantly increased in recent years. A market research conducted in late 2010 showed that Greek consumers pay unreasonably high prices for finished products from local production and imports which are of shamefully low wholesale prices at the beginning of the trading process.
16 MPs from the PASOK parliamentary group asked the Minister of Agricultural Development Kostas Skandalidis in Parliament about the pricing of agricultural products because the surplus charge between the producer and end consumer prices in some cases is between 200% and 1500%. Such is the case with cereal and flour as there is a huge difference between the initial price of the main product and its cost in the price of the end product.
The price differences are taken from a research of the Union of Farmers. The analysis of food market pricing in Greece from the manufacture and import to the end user has found an unexpectedly large discrepancy between the levels of wholesale prices and the consumer prices in supermarkets and free markets. The research of the farmers shows that differences in the price of rice reached 660% in the most extreme cases, 750% in wine prices and 760% in pasta prices.
According to people familiar with agricultural developments in Greece, commercial companies are the most serious factor in forming the high prices of agricultural products. In many cases, they buy the products from many small producers and then present themselves as manufacturers to retailers and major purchasing companies. They increase the prices in the trading process which ultimately affects either the end user, or the actual manufacturer.
The Ministry of Agricultural Development and Food is aware of similar cases of end prices additionally burdened by commercial companies. Therefore, national register of traders of agricultural products is a tool for agricultural markets regulation. All merchants listed in the register will meet certain requirements such as tax perfection, needed facilities and storage area. Meeting these requirements will ensure on the one hand that the commercial companies are legal and not speculators that entered the market for quick profits. On the other, the lists themselves will enable manufacturers to make direct contact and agreements with the chosen company.
Kostas Spiliopoulous, socialist MP from the municipality of Haia, said after the meeting with Minister Skandalidis that the Ministry of Agricultural Development and Food has responded rapidly to the problems. He noted that the team of Minister Skandalidis prepared the draft on the register of agricultural products traders in less than two weeks. It is expected to be voted on and adopted by the end of January 2011. Kostas Spiliopoulous also stated that the bill is the first step towards regulating the agricultural market and does not violate the principles of free competition and contributes to transparency and free trade.
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